Sovmots Investments Ltd v SSE [1979]

Sovmots Investments Ltd v Secretary of State for the Environment [1979] AC 144

Property Law – Compulsory Purchase – Ancillary rights

Facts:

A 150 year lease was granted to S Ltd (appellant) who built an office complex. 36 residential maisonettes were on top of the office complex but were not inhabited. The London Borough Council (LBC) purchased the flats as a leasehold. A special right of access was granted over the lifts and stairs. Ancillary rights were expressly passed in the conveyance (water, gas, electricity). LBC subleased the flats to B Ltd (appellant). A public inquiry found that even though LBC did not purchase the flats as a freehold, it did not invalidate the compulsory purchase as LBC had grounds to do so under s 189(1) of the Housing Act 1957 (the Act). The appellants objected.

Issues:

Whether the maisonettes were houses under the definition and whether the ancillary rights were required to be specified in the compulsory purchase order.

Held:

The appeal was allowed. Wheeldon v Burrows was considered, finding that the ancillary rights sought to be acquired did not pass under the first rule of Wheeldon. Instead, it related to voluntary conveyances for the sale of land and was established on the principle that a grantor could not derogate from his own grant. It did not apply to a compulsory purchase. Further the ancillary rights did not suffice s 62 of the Law of Property Act 1925 as it could not operate unless there had been some diversity of ownership or occupation of the quasi-dominant and quasi-servient tenements to the conveyance. The ancillary rights did not pass by necessary implication even though the definition of a “house” under s 189(1) of the Act was wide.